A special purpose acquisition company (SPAC) chaired by former House Speaker Paul Ryan is teaming up with Dallas-based private equity (PE) firm Grey Rock Investment Partners to form a publicly traded Lower 48 exploration and production (E&P) company.

granite ridge pie chart

Under the proposed transaction, Grey Rock would join forces with Ryan’s Executive Network Partnering Corp. (ENPC) to create Granite Ridge Resources Inc. 

Granite Ridge, with an estimated pro forma enterprise value of $1.3 billion, would pursue nonoperated working interests and joint ventures in the Permian Basin and other prolific Lower 48 plays, Grey Rock and ENPC said. 

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“We see a tremendous market opportunity driven by the ever-increasing global demand for traditional energy commodities,” said Grey Rock’s Griffin Perry, co-founder. “In creating Granite Ridge, we have the unique opportunity to build a new company anchored by a premiere, scaled, non-operated oil and gas platform diversified across five of the most prolific basins in the United States.”

The transaction, if approved by regulators and the SPAC stockholders, would see Granite Ridge take ownership of oil and gas assets currently held by Grey Rock in its Fund I, Fund II and Fund III portfolios. Net production from the assets is expected to average about 20,500 boe/d in 2022. 

The Permian accounts for 51% of the assets’ current production, followed by the Bakken Shale (18%), Denver-Julesburg Basin (12%), Eagle Ford Shale (12%) and Haynesville Shale (7%). 

Gross proceeds of about $414 million would be transferred to Granite Ridge under the deal “for growth capital purposes, including future acquisitions,” the firms said.

Griffin’s fellow Grey Rock co-founder Matt Miller said the partnership aims “to create healthy, risk-adjusted returns in underserved areas of the oil and gas market, while creating long-term value for Granite Ridge’s stockholders.”

Ryan, who served as the 54th Speaker of the House from 2015-2019, said the transaction “reflects our philosophy and commitment to matching accomplished, proven executives and great assets, with the proper capital structure to maximize results and value creation…”

He added, “As hydrocarbons continue to play an important role in the global energy mix, we are confident that Granite Ridge, led by a world-class team with deep operational, technical, and financial expertise, is a compelling opportunity for investors looking to participate in the energy space.”

Luke Brandenberg and Tyler Farquharson have been tapped to lead Granite Ridge as CEO and CFO, respectively.

“I look forward to leading Granite Ridge as we enter the public market and seize the opportunities presented by today’s energy environment,” said Brandenberg. He served previously as managing director of Vortus Investment Advisors LLC, a Fort Worth, TX-based PE firm.

Farquharson is currently CFO of Exco Resources Inc., a Dallas-based independent E&P.

In a recent interview with NGI’s Shale Daily, Haynes and Boone LLP partner Jeff Nichols forecast an uptick in E&P assets transferring from private to public hands through merger and acquisition (M&A) deals. He explained that, “the capital markets are starting to open up, more investors are coming back to the space, so…we may look forward to more M&A deals where private companies sell asset packages to public companies, and private companies go public themselves.”